Justinian Lane

California Appellate Court Holds That Defendants Are Liable For The Full Cost of Medical Care

This is a major victory for the civil justice system in California.

A prevailing plaintiff should be entitled to recover the full cost of her medical care, even if her private insurer paid a smaller, negotiated amount to cover all of her hospital and doctor bills, California's 4th District Court of Appeal panel held Monday.

The decision overturns a San Diego County Superior Court ruling that cut plaintiff Rebecca Howell's jury award for medical expenses from $189,978 to $59,691 on the grounds that she should only recover the amount her insurer, PacifiCare, paid to settle her bills, not the initial amount her medical providers charged. Howell suffered severe neck injuries when the driver of a Hamilton Meats & Provisions truck made an illegal U-turn and struck her car.

Under California's collateral source rule, "Howell, as a person who has invested insurance premiums to assure her medical care, should receive the benefits of her thrift; and Hamilton, as the party liable for Howell's injuries, should not garner the benefits of Howell's providence," Justice Gilbert Nares wrote for the unanimous three-justice panel.

What’s going to be very interesting to watch is how healthcare reform affects this decision (if at all). Under California law, this decision doesn’t apply to anyone who has government-provided health insurance, but instead applies only to those with private insurance. Would an individual who takes “the public option” (if it’s offered) not be able to recover the full cost of medical care? Or if we’re all required to buy private insurance, will the rationale of this case go away?